This blog is dedicated to 'quality'. I plan to include reviews, articles, views, news, jobs, etc. on quality. I’m part of the ASQ Influential Voices program. While I receive an honorarium from ASQ for my commitment, the thoughts and opinions expressed on my blog are my own.
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Friday, January 27, 2012

ASQ’s CEO, Paul Borwaski, has posted a very
interesting piece on his blog this month. I won’t steal his thunder. Read it here…

While Paul has
anchored his post on his favorite (and mine too) Baldrige program, the point he
makes is far-reaching. If quality is
valuable to a company, what is this value?

Unlike, usual
responses which use twists of the English language to try and avoid answering what
this value is, there are a couple of economists who have ascertained that the
Baldrige program returns upto 820 times to one! If you don’t believe me or
Paul, you are welcome to check the
study here.

Honestly, I am
not surprised at the magnitude of returns Baldrige provides, what is interesting
is that finally there is interest and action on bringing Quality and Finance
together. Dr. J M Juran was right (as he was on whatever he said!) when he said
quality needs to speak the language of senior management (money) to succeed.

As a quality
professional and assessor of business excellence programs I am noticing a very
strong and welcome trend – quality professionals are being asked to prove their
worth in $. Why not, when for years Marketing and Advertising have been
measured like this. If we really make an impact, there must be a way to measure
it.

Don’t get me
wrong, I agree and understand that there are intangible benefits of quality. These
include a change in culture, improved skills, better mindset, leadership etc.
but if I was in the CEO chair I wouldn’t care for these if quality doesn’t deliver
on its basic promise. And no CEO should.

It is time the
quality profession is treated like a product or service that must firs provide
its basic function and then deliver the ‘good to have’. What is this basic function?
Lesser defects and reduced cycle time, what else?

Once you are on
the road of lesser defects and time, you can use quality principles to improve
revenue. If you progress on improving
revenue, you should consider improving the quality of management systems using
frameworks such as Baldrige. I shudder to think of a company who is gaga over Baldrige
but does not have a robust defect prevention program.

Are companies
listening to this need to marry quality and finance? Yes. The three major
recessions of the last decade have had many companies do this. I know of
companies that measure quality and productivity improvement in $ and/or
capacity released. Quite creative. If you have really improved quality and productivity,
shouldn’t the process need lesser people? Be ready to prove it.

This proposed
marriage reminds of a client early in my consulting career. After seeing early
results of a quality improvement program, the Chief Financial Officer of an
FMCG company asked to be the head of its quality improvement program. He had
seen what many need to see now!